On Thursday, the US Securities and Exchange Commission (SEC) approved applications from the Chicago Board Options Exchange, Nasdaq, and NYSE to list Ether-based exchange-traded funds (ETFs). The products are expected to become available for trading in 2024.
Ether spot ETF approval came as a surprise
The approval came as a surprise for the exchanges and the cryptocurrency community in general, which had expected the omnipresent regulator to reject the applications. VanEck, ARK Invest/21Shares, and seven other issuers are hoping to launch Ether ETFs after the SEC approved Bitcoin ETFs in January, which was a landmark moment for the industry.
Matthew Sigel of VanEck issued a statement on the SEC’s approval of spot Ether ETFs:
We are so thrilled to report that the US Securities and Exchange Commission (SEC) has approved, pursuant to Section 19(b) of the Securities Exchange Act of 1934, our exchange partner CBOE’s proposed rule change to list and trade a spot Ether ETF on the CBOE.
Are Solana ETFs next?
Nate Geraci, President of the ETF Store and host of ETF Prime, tweeted that a Solana-based ETF will not exist until CME-traded Solana futures are launched or Congress establishes a legitimate crypto regulatory framework. This is amidst speculations that Solana exchange-traded funds (ETFs) might be the next to be initiated and potentially approved in the US as it is the second-largest coin, following Ethereum (ETH), in terms of market capitalization.
Meanwhile, James Seyffart, an ETF analyst for Bloomberg, stated that a Solana ETF would likely have high demand, second only to Ether among altcoin ETFs. However, he noted that launching a Solana ETF would be challenging due to the unclear regulatory status of Solana (SOL). The SEC’s classification of SOL as a security in lawsuits against major exchanges like Binance, Coinbase, and Kraken has added to the complexity.
This situation will make approving a Solana ETF difficult, to say the least. According to him, it could take several years, subject to the regulatory environment in the United States, which isn’t the most inviting at the moment. Based on precedent, it could happen within a few years of having a futures market regulated by the CFTC. He concurs that having a crypto regulatory framework in place would speed up the process.
A recent Bernstein report suggests that the approval of the Ether ETF in the US could set a precedent for classifying Solana as a commodity. It indicates that the SEC views Ether as a commodity, leading to expectations for Solana to follow suit.
According to Coinmarketcap data, Ether’s price has increased 24% over the past week, while Solana’s price has remained flat within the same period.
